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The Pros And Cons Of Investing In The Cannabis Market

Unsure about taking the plunge and investing in the cannabis market? We explain some of the pros & cons to consider.

The History

Cannabis has had a turbulent history, to say the least, but it has come a long way and has transformed the original perception of the medicinal plant now in 2021, compared to when President Nixon declared ‘War on Drug’s’ in 1971 after Controlled Substances Act Classifies Marijuana as a Drug with “No Accepted Medical Use”. [1]

Canopy Growth was the first pot stock’ to list on the stock market (Toronto’s TSX Venture Exchange) in 2014 and in 2019 it had witnessed a 2,139% increase. Demonstrating how much the cannabis market has evolved over the years and how investors have noticed its potential.

Younger generations are more educated around cannabis in its medicinal form and the old-age stigma attached to cannabis seems to be quickly fading away.

So what are the pros of investing in cannabis?

PROS

  • It’s demonstrated excellent returns for investors
  • It can be a valid portfolio diversifier
  • It has great economic growth potential for countries across the globe
  • By regulating cannabis it will help to reduce black market communities or gangs
  • The evolvement of different country jurisdictions means more regions are legalising cannabis for both recreational and medicinal purposes
  • High-risk investments breed high returns
  • Was deemed ‘recession proof’ amid the COVID-19 pandemic

   CONS

  • Research into cannabis is still in its infancy and therefore the long-term health effects are not fully understood
  • Some unregulated companies that produce cannabis increase safety risks for consumers
  • Is deemed a high-risk investment
  • The high tax rates being assigned to the legal-channel product

Every investment opportunity comes with a certain level of risk. It is important to remember that the key is to manage risk, not avoid it. Some of the greatest risks taken are the best opportunities. Investing in a niche market like medicinal cannabis has exposed investors to a range of companies across the supply chain, which means it’s a great diversifier.

If you’re interested to learn more about an investment in the sector, you can visit www.jpdcapital.com/investors and secure a FREE consultation.

References:

  1. https://medicalmarijuana.procon.org/historical-timeline/

 

 

 

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by Harness Editor

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